My First Credit Card
Your first credit card is a big deal; that powerful piece of plastic can help you establish a solid credit history. Armed with an impressive credit score and steady income, you’ll be on your way to building the life you want. So, how easy — or difficult — is it to get your first credit card?
Obtaining your first credit card isn’t as easy as it once was. Laws curbing aggressive attempts to recruit college-age customers has helped rein in reckless credit-card spending. Unfortunately, they’ve also made it harder to prove your creditworthiness. Showing card issuers you can repay your debt without 40-hour-a-week employment may be the trickiest part for college students.
Without a full-time job, paying your bills on time is the only way to prove yourself to credit card companies. You’re probably asking the obvious question: How can I establish a good credit history if no one will give me a card in the first place?
Ask Someone to Co-Sign
When you become an authorized user on someone else’s account, the account stays in his or her name. However, you will have a card with your name on it, and the cardholder’s good payment history helps you build your own credit.
Move to Off-Campus Housing
If you can’t get anyone to co-sign or make you an authorized user, consider moving to an off-campus house or apartment. Ask your landlord to report your rent payment history to the credit bureaus to help you establish credit.
Get a Secured Credit Card
Secured credit cards are often looked upon as last-resort options. Many carry high interest rates and equally exorbitant fees. Not all secured cards are created equal, though. It is possible to find a secured card with reasonable rates and fees. Look for a card from a reputable company, and compare rates before applying. You’ll need an outlay of cash to make a deposit equal to your line of credit. Make small purchases, and pay your balance in full and on time. Before you know it, you’ll be the proud owner of a respectable credit history.
Now that you see how much work it takes to establish credit, the importance of maintaining good credit should be equally obvious. Your first credit card can help you build the credit you need to buy your first home, take a month to travel, or even start a business. Keep up the good work, and you’ll be on the path to building that post-graduation dream life of yours.